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Airbnb is one of the most popular ways of making an income on the side. But what Airbnb tax impacts should you look out for?

Airbnb offers a great opportunity to rent out that spare room without the long term commitment. Or, it’s a handy way to lease a holiday home that would be quiet for much of the year. Both of these things are great – but some Airbnb hosts may not realise the effects and benefits come tax time.

Australian Airbnb tax information for Australia can be tricky to find, so let’s try to touch on some important bits right here

Extra income means extra taxes to pay at year-end

Why not spend all your Airbnb income? Because earning that extra income means you’ll be charged more tax by the ATO at the end of the year. It is important to save some of what you earn through Airbnb so you can pay the ATO at tax time.

Don’t just save a few dollars!

In the first year when you top-up your income with untaxed earnings from Airbnb and other types of ‘side businesses’, you might need to save as much as 30 or 40 per cent of your new earnings for tax! The amount depends on the total income you earn and the amount of tax deducted from your other income sources. Your tax agent can help you predict the right amount you should save for the “tax man.”

Airbnb Tax benefits

Renting a room out of your existing property does create some income and tax perks.

You can claim expenses and depreciation for the percentage of the area of your house that was available for rent.

Airbnb tax advantages can include properly-calculated portions of…

  • Internet and phone costs
  • Water, power and council rates
  • Upkeep and repairs
  • Depreciation on the cost of furnishings and equipment
  • Interest on your mortgage